(New York) Oil prices ended sharply higher on Friday, the two black gold benchmarks having exceeded 110 dollars a barrel, boosted by prospects of easing of containment in Shanghai and by the proposed European embargo. on Russian oil.
Updated yesterday at 3:54 p.m.
A barrel of Brent North Sea oil for July delivery gained 3.81% to $111.55.
A barrel of US West Texas Intermediate (WTI) for June delivery rose 4.10% to $110.49.
The prospect of an easing of health restriction measures in Shanghai, according to press reports, has galvanized prices.
If around fifty new cases of COVID-19 have been detected in Beijing, according to the Chinese Ministry of Health, a decline seems to be underway in Shanghai where the city authorities, according to NBC News, have suggested hoping for the end of new contaminations. by the end of next week.
The most populous city in China with 25 million inhabitants has been confined since the beginning of April.
“China is talking about reopening Shanghai perhaps as early as May 20,” said Phil Flynn of Price Futures Group. “While we believed that the containment would last longer, the market sees this information as a sign of a change of direction. This would mean a big boom in oil demand in an already very tight market.”
Another factor that pushed prices up was the proposed EU embargo on Russian oil currently under discussion.
It needs unanimity of the 27 member states for it to be adopted and for the moment it is blocked by Hungary, dependent on Russian oil and gas.
“Discussions are continuing within the European Union on whether or not they will adopt this embargo against Russian oil. There are signs that they are moving forward and that has supported prices,” said Phil Flynn.
For Louise Dickson, analyst for Rystad Energy, “an EU embargo, if fully adopted, could put around 3 million barrels per day of Russian oil out of the pipeline, which will completely disrupt and ultimately change the global trade flows, causing market panic and extreme price volatility”.
Phil Flynn also noted, on the supply side, the fall in diesel and diesel exports from Russia “as buyers turn away from Russian products”.
“There are not many offers to replace these needs and this is reflected in prices,” said the analyst from Price Futures Group.
“It remains to be seen how long buyers will be able to refuse to acquire Russian products,” he added.